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BP oil headline earnings Q2 2022

A BP gas station in Madrid, Spain.

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LONDON — British oil giant BP on Tuesday reported a rise in second-quarter profit, benefiting from rising commodity prices.

The British energy company posted a second-quarter underlying replacement cost profit, used as a measure of net profit, of $8.5 billion.

That compared with a profit of $6.2 billion in the first quarter of the year and $2.8 billion for the second quarter of 2021. Analysts had expected BP to post a first-quarter profit of $6.3 billion, according to Refinitiv.

BP also announced on Tuesday a 10% increase in its quarterly dividend payment to shareholders, raising it to 6.006 cents per common share.

BP shares are up nearly 20% year-to-date.

BP’s results once again highlight the stark contrast between Big Oil’s profits and those facing a deepening cost-of-living crisis.

The world’s biggest oil and gas companies have smashed record profits in recent months, following a surge in commodity prices triggered by Russia’s invasion of Ukraine.

For many fossil fuel companies, the immediate priority appears to be returning cash to shareholders through buyback programs.

Last week, BP’s UK rival Shell reported record second-quarter results of $11.5 billion and announced a $6 billion share buyback program, while British Gas owner Centrica reinstated its dividend after a huge increase in first half earnings.

Cost of living crisis

Environmental campaigners and trade unions have condemned Big Oil’s soaring profits and called on the UK government to impose meaningful measures to reduce the cost of rising energy bills.

Last month, a cross-party group of British lawmakers called the government increase the level of support to help households pay rising energy bills and introduce a nationwide plan to insulate homes.

The price cap on the most widely used energy tariffs is set to rise by more than 60% in October due to rising gas prices, pushing average annual household dual-fuel bills to more than £3,200 ($3,845).

Fuel poverty charity National Energy Action has warned that if this happens, it will push 8.2 million homes – or one in three British homes – into energy poverty. Fuel or energy poverty refers to when a household is unable to afford to heat their home to an adequate temperature.

“Clearly not everyone is struggling with the energy crisis,” said Shana Youssef, energy campaigner at Friends of the Earth, reacting to the Shell and Centrica results. “These big gains will be greeted with disbelief by the millions of people across the UK who are facing skyrocketing energy prices.”

Yusuf called on the British government to impose a tougher windfall tax on energy businesses. “Most of these profits should be used to insulate our homes and help cash-strapped households pay for their heating this winter, rather than developing more fossil fuel projects that are baking the planet,” Yusuf said.

The burning of fossil fuels such as oil and natural gas is a major driver of the climate crisis, and researchers have found that fossil fuel production remains “dangerously out of sync” with global climate targets.

Speaking in June, UN Secretary-General Antonio Guterres called for an end to fossil fuel funding, describing the new funding for fossil fuel exploration as “delusional”.

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